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Answer to Question #74285 in Microeconomics for Zulfiqar Ali
Question #74285
Unique foods operates three plants in the world. Summary data for each is shown below
Plant
UK USA Canada
Total Fixed Cost(TFC) 1,00,000 2,00,000 4,00,000
Variable Cost Per Unit (AVC) 10 8 5
Output price per unit (P) 20 22 18
Capital / Labor Ratio (K/L) 2:1 3:1 4:1
Output rate (Q) 22,000 16,000 33,000
Determine the profit elasticity for each plant
Plant
UK USA Canada
Total Fixed Cost(TFC) 1,00,000 2,00,000 4,00,000
Variable Cost Per Unit (AVC) 10 8 5
Output price per unit (P) 20 22 18
Capital / Labor Ratio (K/L) 2:1 3:1 4:1
Output rate (Q) 22,000 16,000 33,000
Determine the profit elasticity for each plant
Expert's answer
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